Purgess v. Sharrock
| Decision Date | 17 August 1994 |
| Docket Number | Nos. 1425,D,1669,s. 1425 |
| Citation | 33 F.3d 134 |
| Parties | 1994-2 Trade Cases P 70,691 Jan R. PURGESS, M.D., Plaintiff-Appellee-Cross-Appellant, v. Nigel SHARROCK, M.D. and The Hospital for Special Surgery, Defendants-Appellants-Cross-Appellees. ockets, 93-7969, 93-9099. |
| Court | U.S. Court of Appeals — Second Circuit |
Ronald S. Rolfe, New York City (Cravath, Swaine & Moore, Lewis J. Liman, Brian D. Hail, of counsel), for defendants-appellants-cross-appellees.
Michael G. Berger, New York City, for plaintiff-appellee-cross-appellant.
Before: PRATT and JACOBS, Circuit Judges, and MOTLEY, Senior District Judge, United States District Court for the Southern District of New York, sitting by designation.
When Dr. Jan R. Purgess, an anesthesiologist, was terminated from employment at the Hospital for Special Surgery ("HSS"), he brought this action, asserting several claims against HSS and Dr. Nigel E. Sharrock, its Director of Anesthesiology. His claims included alleged violations of the federal antitrust laws plus state claims of breach of contract, defamation, and tortious interference with prospective economic advantage. The district court dismissed before trial all of the federal claims except a Sherman Act claim, which was dismissed by judgment as a matter of law after all of the evidence was submitted to the jury.
After thirteen days of trial, the jury returned verdicts on the state-law claims totalling $4.6 million in compensatory damages, plus $4.6 million in punitive damages. Purgess consented to a remittitur of $4.1 million on the punitive damages award. Judgment was therefore entered in the amount of $5.1 million.
Sharrock and HSS do not challenge on appeal the judgment on the breach of contract claim. They do, however, present multiple issues relating to the other claims, including challenges to jurisdiction, sufficiency of evidence, jury instructions, and admissibility of evidence. Finding no merit in any of defendants' challenges, we affirm on defendants' appeal.
Purgess cross-appeals claiming that: (1) the amount of punitive damages should be modified to the extent of reinstating the full $4.6 million jury award; and (2) the district court erred in dismissing Purgess's federal antitrust claim of a group boycott. Purgess presses his group-boycott appeal only if we should order a new trial on any of the other claims. Since we are not disturbing the district court's judgment, Purgess's group-boycott claim is treated as withdrawn. Since Purgess accepted the remittitur, we dismiss that aspect of his cross-appeal.
Purgess began a provisional, one-year appointment to HSS in October 1988. He had worked at New York University Medical Center ("NYU") the previous six years, during the last three of which he had been an attending anesthesiologist, specializing in cardiac surgery.
Two months after he had been hired by HSS, Purgess was interrupted, while administering anesthesia for a spinal surgery operation, by a summons to the office of Dr. Nigel E. Sharrock, Director of the Department of Anesthesiology. In the presence of then Associate Director John A. Ahearn, Purgess was asked to submit his resignation, and was told that his alternative to resignation was to be terminated, effective immediately.
Before that meeting, Purgess had not been involved at HSS in any formal or informal investigation, and HSS conceded that before terminating Purgess, there never had been any formal finding "that Dr. Purgess either caused or contributed to the problems" of any patient he had treated at HSS. Similarly, HSS had never deemed any incident involving Purgess to be reportable to the State Office of Health Systems Management, although a report is required whenever there is any incident involving a physician that "cause[s] patient harm."
When challenged by Sharrock, Purgess refused to resign, because he did not believe that he had done anything wrong, and because he thought a resignation might serve as a waiver of his rights to a fair hearing and other procedural protections. True to his threat, Sharrock told Purgess he was terminated. Despite multiple requests by Purgess for fair review of his termination and for a hearing, the hospital board approved Sharrock's After Purgess's termination, Sharrock and other HSS officials sent several communications to other hospitals and state medical examiners; it is these communications that form the basis for Purgess's state and federal claims.
action and did not provide Purgess with a hearing, as required under HSS's by-laws.
On January 6, 1989, after plaintiff had been terminated, the president of HSS filed a report with the New York State Office of Professional Medical Conduct (OPMC), stating that plaintiff's "privileges" at HSS had been "revoked" That provision requires a report of a physician's termination to be filed only if the termination is for "reasons related in any way to alleged mental or physical impairment, incompetence, malpractice or misconduct or impairment of patient safety or welfare." Purgess claims that the mere filing of this report by HSS with a specific reference to the statute constituted a statement that he had been terminated for one of the defects listed in the statute.
But HSS went even further. Purportedly to justify his loss of privileges and his termination, HHS also sent to OPMC five medical charts represented as relating to patient incidents involving Purgess. One of those five cases involved another anesthesiologist, not Purgess, and the error was not inadvertent, for Ahearn, who had prepared the certification accompanying the records, admitted that before he sent the charts to OPMC, he knew that the patient involved had not been Purgess's patient.
After he was terminated by HSS, Purgess applied to NYU for reinstatement of the privileges he had held there before resigning to begin work at HSS. As required by law, NYU then sent to HSS a questionnaire relating to Purgess's work at HSS. In response to the question whether he had been terminated "for alleged malpractice or misconduct", HSS marked "Yes."
After receiving the filled-out questionnaire from HSS, NYU, through Dr. Turndorf, requested details about the circumstances of Purgess's termination. Mr. Ahearn explained that Purgess had been involved in four quality-of-care incidents at HSS. The most serious were two "episodes of asystole". The term asystole refers to a "heart stoppage" and carries an implication that the anesthesiologist had done "something wrong" and either "not * * * recognized it right" or not "treated it right". Also, in a telephone conversation with Turndorf, Sharrock continued to assert that Purgess had been terminated because he was responsible for two asystoles. In a pretrial filing with the court that was read to the jury, Sharrock and HSS had admitted that "[HSS's] reference to a second incident of asystole (in the letter to NYU) was a mistake," and that "another doctor was the attending anesthesiologist during the other incident of asystole." Turndorf testified that even though he "had a lot of confidence in Purgess" and "knew that Purgess was a good practitioner," HSS's allegations "sound[ed] suspiciously as though Purgess had really done something wrong," and he "didn't feel in good conscience [that he] could appoint Purgess to [NYU]." Purgess did not receive an offer of employment from NYU.
In early 1989, shortly after HSS had terminated Purgess's employment, Purgess applied for a private-practice position as anesthesiologist at Hackensack Hospital in New Jersey, a position that required him to obtain a New Jersey license. But Sharrock and HSS failed to respond to inquiries from the New Jersey Board of Medical Examiners ("BME"), and thereby delayed his licensing in that state and made it impossible for him to work at Hackensack. The BME explained that "[t]he hospital [HSS] was contacted by phone and they declined to offer any additional information. The board office followed up with a letter requesting additional information and none has been forthcoming as Purgess filed a complaint in the United States District Court for the Southern District of New York against Sharrock and HSS, alleging violations of the Sherman Act, 15 U.S.C. Secs. 1, 2 (1988), and the Racketeer Influenced Corrupt Organizations Act, 18 U.S.C. Sec. 1962(a)(b), (c) and (d) (1988), denials of due process and equal protection, and pendent state claims of breach of contract, libel and slander, tortious interference with prospective economic advantage, fraudulent inducement, "wrongful withdrawal of privileges and academic affiliation", unfair competition, and intentional infliction of extreme emotional distress.
yet." Purgess did not receive an offer of employment from Hackensack
Early in the litigation, Judge David N. Edelstein denied completely defendants' motions to dismiss under Rule 12(b)(6); however, before trial, Judge Louis J. Freeh, to whom the case had been reassigned, dismissed all of Purgess's claims except those alleging a group boycott in violation of Sherman Act Sec. 1, libel and slander, breach of contract, and tortious interference with prospective economic advantage.
After a thirteen-day trial, the jury awarded Purgess compensatory damages of $400,000 on the breach of contract claim, $700,000 on the tortious-interference claim, $3.5 million on the claims of libel and slander, and $4.6 million in punitive damages. The district court denied defendants' post-trial motion for judgment as a matter of law, but ordered a new trial unless Purgess agreed to a remittitur of the punitive damages award to $500,000. Purgess accepted the remittitur, and an amended judgment in the amount of $5.1 million, plus...
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